Palmer’s CITIC battle ‘endangers 3000 jobs’

West Australian Premier has threatened to alter a key contract to solve the dispute between Palmer and CITIC.

Businessman Clive Palmer.

West Australian Premier Mark McGowan has launched an attack on Clive Palmer, threatening to alter a key contract in the hope of solving the latest dispute between the Queensland businessman and Chinese giant CITIC.

Speaking in parliament, Mr McGowan said he was “very disappointed” in Mr Palmer’s conduct and warned that 3000 jobs could be lost at the troubled $US10 billion Sino Iron project in the Pilbara.

He strongly backed CITIC, the operator of the project, in the most recent legal war that has erupted between the Chinese government-owned conglom­erate and Mr Palmer’s private company Mineralogy.

CITIC says the tailings dam at Sino Iron needs to be expanded to ensure production can continue and it has accused Mineralogy of failing to sign off on the approvals required under the state ­agreement.

A state agreement is a legal contract between the WA government and the proponent of a major project that is intended to provide long-term certainty.

State agreements are rarely changed because of sovereign risk and the potential for litigation.

It is understood an alteration of the Sino Iron state agreement could obviate the need for Mineralogy to sign off on the expansion.

The dispute over the tailing dams comes amid a long-running legal war between CITIC and Mr Palmer over royalties from the project.

Mr McGowan said yesterday that 3000 workers at Sino Iron should be concerned about the behaviour of Mr Palmer and Mineralogy, which holds the leases that underpin the project.

“I am very disappointed in Mr Palmer’s unreasonable response and his behaviour on this matter,” he said.

“I urge Mr Palmer to resolve these issues with CITIC as soon as possible for the interests of Western Australia, Australia and the livelihoods of 3000 Australian workers.”

Mr McGowan said he welcomed an offer by Liberal leader Mike Nahan to support any alteration of the state agreement.

“State agreements are … a privileged instrument for the companies that are party to them, and by their very nature they are there to ensure the state’s best interests are looked after,” Mr McGowan said.

“Clive Palmer and Mineralogy are on notice.

“At the end of the day, this government will do what’s in the best interests of Western ­Australia and the 3000 hardworking individuals at CITIC’s operations.”

Mr Palmer could not be reached for comment.

But earlier this month, he had accused CITIC of trying to take land for its project without paying for it.

“The problem is the Chinese don’t want to pay for anything,” he said.